Australian Red Cross defends spending 10% of bushfire donations on office costs
The Australian Red Cross has defended its decision to spend up to 10% of bushfire donations on administration costs as “essential”, but its past fundraising history shows it has previously promised to put 100% of all money raised directly to a cause.
Facing criticism from the New South Wales Liberal MP for Bega, Andrew Constance, who nearly lost his home in the fires, for taking to taking too long to distribute $115m in donations it has received since July, the charity on Thursday clarified that it would not withhold money for future disasters.
But Constance’s comments have put a spotlight on the fundraising practices of the organisation, which has been at the centre of the public donations drive, raising twice as much as any other organisation.
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On Thursday, the charity conceded that up to 10% of all donations would be set aside for office costs, claiming that it had always been upfront about this figure. It puts the charity at odds with the St Vincent de Paul Society, which said on Thursday it would not take administrative fees for its emergency appeal.
It also puts the charity at odds with its own promise last year to put 100% of donations from its “Help Aussie Farmers” towards helping severely drought-affected farmers.
In a press release in November, the Red Cross’s chief executive, Judy Slatyer, said: “It’s going to be a long hard road ahead for farmers and their communities. People can still donate and 100% of all donations are going to severely drought-affected farmers.”
Asked by Guardian Australia about the discrepancy, the Red Cross said the charity had set up an individual fund for the drought, but had not taken the same decision for the bushfires.
Instead, it has directed donations to a standing fund, the Disaster Relief and Recovery Fund, which operates all year round to support the charity’s disaster work.
“We started raising funds for the Disaster Relief and Recovery Fund since July, that’s a standing fund that supports our emergency work so that we’re able to be on the ground,” Noel Clement, the Red Cross’s director of Australian programs, told Guardian Australia.
“With drought appeal, we have one of our corporate supporters agree to pick up the administrative costs. That was why we were able on that occasion to say 100%.
“The majority of our appeals, unless we’re doing them with a partner or a government or somebody, we would be seeking up to 10% to be able to apply for administrative costs.”
Asked if it was a mistake not to set up a specific bushfire fund, Clement said the charity had been concerned it would have “confused people”.
“We had a number of fires in September, October, November. What we didn’t have was an event that we decided … this is a scale that we should launch a specific appeal,” he said.
“The difficulty was [by January] we were already receiving tonnes into the Disaster Relief and Recovery Fund too. To launch a separate appeal when we’re already raising money over several months, I believe would have just completely confused people. So we stuck with the approach we had.”
Clement said the administrative costs would include “back office support” and “essential administrative support” to assist Red Cross staff on the ground.
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“That’s what that administrative component is, but I’d need to be clear that we say up to 10 cents on the dollar, we said that from when we had a million dollars in the fund,” Clement said.
“We don’t intend to spend 10 cents. That’s not what that says. What it means is, you know, it’s basically what’s essential. We’re focused on driving that to be as low as it can be.”
By Thursday, the organisation said of the $115m it has raised since July, $30m had been allocated for immediate assistance, $18m would go to a three-year bushfire recovery program and $1m had been set aside for a bereavement allowance. It has already issued 690 grants, totalling $6.9m so far.
A further $5m will fund Red Cross staff on the ground in bushfire disaster areas, but that would also used to send support crews to other disasters, such as floods, if they arose, Clement said.
The charity announced on Thursday it had established an advisory panel to help determine how to spend the remaining $61 million balance, which is likely to go towards further “financial assistance and individual and community supports”.
